As Canada-U.S. trade tensions rapidly escalate, Canada’s natural, organic and wellness (NOW) sector is facing growing pressure from tariffs on both sides of the border.
The Canadian Health Food Association (CHFA) warns of impacts across the NOW industry that generates approximately $39.7 billion in economic output, contributes $18.7 billion to Canada’s GDP, and supports approximately 147,100 full-time equivalent jobs, according to research by MNP.
The CHFA is urging the Canadian government to act immediately to ensure its own measures do not magnify the damage, while using every available channel to protect Canadian businesses and market access in the United States.
CHFA NOW Toronto, Canada’s largest trade show dedicated to the natural, organic, and wellness space, takes place from Friday, September 25 to Sunday, September 27 at Exhibition Place.
In an interview with Retail Insider, Aaron Skelton, President and CEO of the CHFA, spoke about the issue.
What specific impacts are Canada’s counter-tariffs having on the affordability and availability of gluten-free foods for Canadian consumers?
Gluten-free foods already come at a premium, and tariffs on affected products create another cost pressure in a category where many consumers have limited flexibility. For Canadians with celiac disease or gluten intolerance, these are necessary dietary staples—not optional purchases.
Our members are concerned about what this will mean for individuals and families who already pay more for the food they need. When businesses can’t find comparable products from Canadian or non-U.S. suppliers, they may have to make those hard decisions to raise prices or stop carrying certain items. This could mean higher grocery bills and fewer choices for Canadians who already have little flexibility in what they can eat.
How are Canadian whey businesses being affected by tariffs on both sides of the border, and what are the potential consequences for the sector?
Demand for protein is growing across categories, and whey was already in limited supply before these tariffs were introduced. Now, Canadian businesses are being squeezed from both sides: affected U.S. whey entering Canada faces a 50% tariff, while affected Canadian whey entering the U.S. is subject to a 50% duty and will face new import restrictions beginning September 29.
Whey moves in both directions across a deeply integrated North American supply chain. CHFA’s research found that over the 12 months to July 2026, the whey and protein tariff codes accounted for approximately $628.7 million in imports from U.S. partners into Canada. During the same period, Canada exported approximately $58 million in whey to the United States.
These are not separate markets. Canadian companies are suppliers, customers and partners to U.S. businesses—and vice versa. Restricting that trade could increase costs, narrow sourcing options and create ripple effects across thousands of products, from protein powders and bars to supplements and functional foods on both sides of the border.
How could tariffs create an incentive for Canadian manufacturers to replace domestically made ingredients with lower-cost alternatives from countries such as China?
When tariffs increase the cost and uncertainty of North American trade, manufacturers naturally have to reassess their sourcing options. In some cases, that could make lower-cost inputs from other markets, including China, more attractive, particularly if Canadian suppliers are also facing higher costs or reduced access to export markets.
That is the risk we need to be mindful of. Canada should be creating the conditions for companies to invest, manufacture and source here wherever possible. Trade measures should strengthen Canadian production and supply chains, not unintentionally make domestic suppliers less competitive or encourage businesses to look further afield for lower-cost alternatives.
Which parts of Canada’s natural, organic and wellness sector are currently experiencing the greatest pressure from the tariffs?
The greatest pressure is falling on businesses that rely on specialized U.S. ingredients, sell into the U.S. market or have few alternative suppliers—particularly in gluten-free foods and whey-based categories such as sports nutrition, supplements and functional foods.
SMEs are especially vulnerable because they often lack the working capital to absorb a 50% tariff, stockpile inventory or rebuild supply chains on short notice.
What I’m hearing from members is that these are not abstract trade-policy questions. They are making real decisions about orders, employees, product lines and whether they can continue serving their customers. These are resilient and innovative Canadian businesses, but resilience should not be confused with an unlimited ability to absorb new costs and uncertainty.
How are businesses responding to the increased costs, and are you seeing any changes in product pricing, sourcing, inventory or consumer choice?
Overall, it really is still too early to know the full impact on businesses or consumers. But we’re hearing from members that they are closely monitoring the situation and considering how they may need to adjust their sourcing, orders, inventory and pricing.
For many ingredients, changing suppliers is not a simple or immediate process. It may require additional testing, reformulation or manufacturing changes, all of which can add time, cost and complexity.
At CHFA, we’re keeping members informed, connecting them with experts and helping open pathways into new export markets. We’re also working directly with government to ensure decision-makers understand the consequences for consumers, supply chains and Canadian jobs.
What could happen to Canadian products, businesses and jobs if the current trade tensions and tariffs continue for an extended period?
If trade tensions and tariffs persist, the concern is that temporary pressures could begin to affect longer-term business decisions. Companies may need to reassess production, investment, product lines and supply chains as they manage higher costs and uncertainty.
Canadian businesses have shown a great deal of resilience and adaptability, but prolonged trade friction can be especially challenging for smaller companies with less room to absorb additional costs. It also reinforces the importance of helping Canadian brands diversify their customer base, strengthen domestic opportunities and explore new export markets so they are not overly dependent on any one trading relationship.
The goal should be to give Canadian companies as many pathways to grow as possible — at home and internationally — while protecting the investment, innovation and jobs they create here.
What specific measures is CHFA asking the federal government to take immediately to protect Canadian businesses, maintain product availability and preserve access to the U.S. market?
We are asking the federal government to immediately remove affected gluten-free and whey products from Canada’s 50% counter-tariffs where adequate alternative supply is unavailable, and to provide expedited relief for businesses already paying these costs.
The government must also work with the United States before September 29 to protect market access for Canadian whey. Support programs need to work for SMEs—including businesses below existing revenue thresholds—and the government must consider the cumulative effect of these measures on Canadian suppliers, integrated supply chains and jobs. Businesses are making decisions now, so relief cannot come months after the damage has been done.
More from Retail Insider:
